    [Appendix]
    [Other Materials]
    [Advance Appropriations, Advance Funding, and Forward Funding]
    [From the U.S. Government Printing Office, www.gpo.gov]

                         THE BUDGET FOR FISCAL YEAR 2002

          ADVANCE APPROPRIATIONS, ADVANCE FUNDING, AND FORWARD FUNDING

        I. An advance appropriation is one made to become available one
    fiscal year or more beyond the fiscal year for which the appropriation
    act is passed. Advance appropriations in fiscal year 2002 appropriations
    acts will become available for programs in 2003 or beyond. Since these
    appropriations are not available until after fiscal year 2002, the
    amounts will not be included in fiscal year 2002 budget totals, but will
    be reflected in the budget totals for the fiscal year for which they are
    requested.
        The Congressional Budget Act of 1974 (31 U.S.C. 1105(a)(17))
    requires inclusion in the budget of ``information on estimates of
    appropriations for the fiscal year following the fiscal year for which
    the budget is submitted for grants, contracts, and other payments under
    each program for which there is an authorization of appropriations for
    that following fiscal year when the appropriations are authorized to be
    included in an appropriation law for the fiscal year before the fiscal
    year in which the appropriation is to be available for obligation.'' In
    fulfillment of this requirement, the table below lists those accounts
    authorized to receive, in fiscal year 2002, advance appropriations for
    fiscal year 2003 and beyond and cites the authorizing statute. Part A
    shows the amounts of advance appropriations included in the 2002 Budget.
        The Administration proposes to reverse the misleading budget
    practice of using advance appropriations simply to avoid spending
    limitations (see A Blueprint for New Beginnings, p. 173). Accordingly,
    for the accounts listed in part B of the table below, the amount
    requested to be appropriated for 2002 is sufficient to provide normal
    funding and no advance appropriation for 2003 is requested.
        Part C of the table completes OMB's statutory requirements by
    providing a listing of accounts for which advance appropriations are
    authorized but not requested in the 2002 Budget.

      A. Accounts for which advance appropriations are included in the 2002
                                                                     Budget:
                            Department of Health and Human Services:
                                 Grants to States for medicaid (42 U.S.C.
                                    1396): $46,602 million for 2003
                                 Payments to States for child support
                                    enforcement and family support programs
                                    (24 U.S.C. Ch. 9): $1,100 million for
                                    2003
                                 Payments to States for foster care and
                                    adoption assistance (P.L. 96-272):
                                    $1,754 million for 2003
                            Social Security Administration:
                                 Special benefits for disabled coal miners
                                    (30 U.S.C. 921): $108 million for 2003
                                 Supplemental security income program (42
                                    U.S.C. 1381): $10,790 million for 2003
    B. Accounts for which 2002 advance appropriations were provided, but for
                                    which no 2003 advance appropriations are
                                                                  requested:
                            Department of Education (20 U.S.C. 1223 and 29
                                    U.S.C. 703):
                                Education for the disadvantaged
                                School improvement programs
                                Reading excellence
                                Special education
                                Vocational and adult education
                            Department of Energy:
                                Elk Hills school lands fund (P.L. 104-106)
                            Department of Health and Human Services:
                                Children and families services programs (42
                                    U.S.C. 9834)
                                Health resources and services (P.L. 106-113)
                            Department of Housing and Urban Development:
                                Housing certificate fund (42 U.S.C. 1437f)
                            Department of Labor:
                                Training and employment services (29 U.S.C.
                                    2801 et seq.)
                            Postal Service:
                                Payment to the Postal Service fund (39
                                    U.S.C. 2401)
     C. Accounts authorized to receive advance appropriations but for which
                                      none are requested in the 2002 Budget:
                            Department of Agriculture:
                                Food program administration (42 U.S.C. 1752)
                                Child nutrition programs (42 U.S.C. 1752)
                            Department of Education (20 U.S.C. 1223 and 29
                                    U.S.C. 703): \1\
                                Education for the disadvantaged
                                Impact aid
                                School improvement programs
                                Indian education
                                Bilingual and immigrant education
                                American Printing House for the Blind
                                National Technical Institute for the Deaf
                                Gallaudet University
                                Special education
                                Rehabilitation services and disability
                                    research
                                Student financial assistance
                                Vocational and adult education
                                Federal family education loans
                                Federal direct student loan program
                                Higher education
                                Higher education facilities loans
                                College housing and academic facilities
                                    loans
                                Howard University
                                Historically black college and university
                                    capital financing program
                                Education research, statistics, and
                                    improvement

        \1\ These statutes erroneously refer to ``advance funding.'' Since
    these statutes describe and clearly intend to provide advance
    appropriations, the affected accounts are listed here.

        II. Advance funding is budget authority that is to be charged to the
    appropriation in the succeeding year but which authorizes obligations to
    be incurred in the last quarter of the fiscal year if necessary to meet
    higher than anticipated benefit payments in excess of the specific
    amount appropriated for the year. When such budget authority is used, an
    adjustment is made to increase the budget authority for the fiscal year
    in which it is used and to reduce the budget authority of the succeeding
    fiscal year. Essentially, this is a device for avoiding supplemental
    requests late in the fiscal year for certain programs, should the
    appropriations for the current year prove to be low. The table below
    lists those accounts for which advance funding authority is requested in
    the 2002 Budget.

                            Department of Labor:
                                Special benefits
                                Federal unemployment benefits and allowances
                            Department of Veterans Affairs:
                                Veterans insurance and indemnities
                                Compensation and pensions
                                Readjustment benefits

        III. Forward funding is budget authority that is made available for
    obligation beginning in the last quarter of the fiscal year for the
    financing of ongoing grant programs during the next succeeding fiscal
    year. The budget authority for such programs is included in the budget
    totals for the year in which it is appropriated. This device is often
    used for education programs, so that grants can be made on a school year
    basis. The language providing forward funding for education programs
    will specify that amounts appropriated, in most but not all cases, will
    not be available until some time into the year of the appropriation
    (e.g., July 1, 2002) and in most cases will specify that such amounts
    will remain available until the end of the succeeding fiscal year. In
    other cases (e.g., Federal Pell grants), the funds become available

    [[Page 1234]]

    on October 1st but are not normally obligated until July 1st or later
    and are available for obligation for an additional year. The table below
    lists those accounts for which forward funding exists or is requested in
    whole or in part in the 2002 Budget.

                            Department of Education:
                                Education for the disadvantaged
                                School improvement programs
                                Special education
                                Vocational and adult education
                                Student financial assistance
                                Educational research, statistics, and
                                    improvement
                            Department of the Interior:
                                Operation of Indian programs

        In the training and employment area, forward funding for youth
    training grant programs provides appropriations for a program year that
    starts on April 1st of the fiscal year of the appropriation. Financing
    extends through June 30th of the following fiscal year. For most other
    training and employment programs, forward funding provides
    appropriations for a program year that starts on July 1st of the fiscal
    year of the appropriation. Financing extends through June 30th of the
    following fiscal year. Program years are authorized for training
    programs under the Workforce Investment Act and operation of the State
    Employment Service under section 6 of the Wagner-Peyser Act. The table
    below lists accounts for which forward funding is requested in the 2002
    Budget.

                            Department of Labor:
                                Training and employment services
                                State unemployment insurance and employment
                                    service operations